20 Ways To Negotiate The Price Of A Home

Negotiating the price of a home can be intimidating. If you’re a buyer, you don’t want to overpay, but you don’t want to lose “your” home to a higher offer. Meanwhile, if you’re a seller, you want to get the best return for your property, but you don’t want to lose the sale.

To help you achieve the best sale price for you, whether you are a buyer or a seller, I’ve put together this list of ways to negotiate the price of a home. 

Get Your Finances In Order

It is impossible to negotiate the price of a home effectively if you do not have a clear picture of what you can afford to pay or afford to accept.

For Buyers

Before you look at properties, review your budget, and know exactly how much you can comfortably afford to pay each month. This payment includes not only your mortgage payment but property taxes, utilities, and all the other bills that come with homeownership.

When you’ve done this, get a pre-approval from your lender. Then sit down and look at the size of your deposit, how much earnest money you may be willing to pay, and the average closing costs for a home in your price range.

Once you have done all of this, you will have a clear picture of all elements of your finances, which will give you a clear picture of your bargaining power.

For Sellers

Before you put your home on the market, know how much you need to cover any outstanding mortgage, closing costs for your current home, and any payments you will need to make for your new home. Then you’ll know the minimum amount you require from your home sale. 

Work With The Right Real Estate Agent

With the proliferation of online resources, For Sale By Owner is becoming more popular. 

However, real estate agents are much more than the glorified administrators that some people see them as. Your real estate agent should also serve as a skillful negotiator who works for you, and you alone.

It is for this reason that both buyers and sellers should sign an exclusive contract with a real estate agent.

Before you sign a contract, take the time to research and interview several real estate agents. Ask each potential agent about their experience in the negotiation of sales contracts and, if possible, speak with previous clients for whom they have negotiated a good deal.

Know The Market

In order to negotiate effectively, you need to know what you can achieve. For example, there is no point in trying to buy a home for $400,000 when similar homes in the neighborhood are selling for $550,000. 

So, begin by looking at comparable properties in the neighborhood and ask your real estate agent how much similar homes have recently sold for. 

Know The Property

Then look at any reasons why this particular property could sell for more or less than the average comparable price.

Things that could affect the price can include:

  • Days on the market: Has this property been for sale for longer than the local average?
  • Planning issues: Are there planning applications in place or impending neighborhood changes that could affect the price of the home?
  • Property history: Has this home previously been the site of a drug lab, violent crime, or unusual death? If so this could influence the price people are willing to pay.
  • Improvements: Are there home improvements that have priced this home out of the local market? For example, take a neighborhood of two-bedroom single-story homes that sell for an average of $300,000. A home with three extra bedrooms in an addition, a top-end kitchen, and an en-suite for every bedroom will be way out of step with surrounding homes.

Understand Other People

Negotiating the price of a home is as much about understanding the other parties in the sale as it is about understanding the market and the property.


A seller who is in no hurry to sell and wants top dollar for their home is not likely to shift on sales price but might be willing to pay some closing costs, include some of the furniture in the sale or compromise elsewhere. However, a seller in a hurry may be more open to moving on the sale price.

On the other hand, if the seller needs a minimum amount to pay off their existing mortgage they may not be in a position to negotiate price, even if they wanted to. But they could be willing to move quickly or wait until you have sold your home.


Buyers who are in no hurry to purchase a home may not be ready to raise their dollar offer, but there may be other leverage such as a closing date they want.

Then again, a buyer who falls head over heels for your home may be willing to pay more.

Other Parties

It is not necessarily just the one buyer and the one seller in the negotiation. There may be other potential buyers who are willing to engage in a bidding war or sellers of other homes who are willing to be more flexible.

Be sure you know everyone involved, their motivations, and what they are, realistically, able to bring to the table. 

Look Past The Sale Price

A home sale is about much more than the final sale price. 

  • Buyers can offer a higher sales price if the seller is willing to pay some or all of the closing costs. This will save the buyer from having to find the cash to pay these costs at closing.
  • The home inspection may throw up some issues that need to be addressed. In this case, the buyer could offer a lower asking price in return for the seller not having to make these repairs. On the other hand, the seller can offer to make any repairs or upgrades the buyer asks for, in return for a higher asking price.
  • If the seller is unwilling or unable to lower the asking price of the property, then they may be able to pay mortgage points instead. This is a tax deduction for the seller and it will lower the buyer’s mortgage payment and save them more money in the long-term.
  • In some circumstances, a buyer may be able to assume the seller’s mortgage. This could give the buyer a better mortgage rate and lower payments.
  • Buyers can ask for, or sellers can offer, items of furniture, window treatments, custom lights, or anything else in the home in exchange for a change to the asking price. Alternatively, the ask could be some redecoration.
  • Some sellers may offer a one year home warranty to a buyer who is willing to make some other concession.
  • Sometimes it is the contingencies in a sales contract that can offer some wiggle room to either buyer or seller. Never waive a “contingent on financing” or “contingent on the results of the home inspection report” clause, but if you can be flexible on the closing date or some other aspect of the contract this can go a long way to smoothing over hiccups related to the sales price.

When it comes down to it, nothing is off the table when it comes to home sale negotiation. The only thing you need to be mindful of is the home appraisal. If you need a mortgage to buy the home, you can never offer to pay more than the banks appraised value.

Negotiation Techniques

It is not just what you negotiate that matters. How you negotiate is equally important.

Some people love to negotiate and see it as a regular part of the sales process, others not so much. You may find yourself negotiating with someone who is easily offended and doesn’t respond well to “playing hardball and as a result, withdraws from the sale entirely. 

This is not an issue if you are happy to walk away from the sale. But if you are committed to buying a particular property, you need to be aware of the other party.

With that point in mind, here are some common negotiation techniques.

Ask For An Escalation Clause

If you are concerned about overpaying for a property but are willing to pay more to outbid another buyer, an escalation clause can be an effective way to deal with your concerns.

Ask your real estate agent to include a clause that says you will pay X amount above any other bid up to, and including your maximum amount. The clause should also say that in order to increase your bid, the seller’s agent must provide a copy on an offer to buy from the other party.

This also provides the seller with a reason to accept your bid now and not wait around on the off chance they will receive a better offer from someone else.

Set An Expiration Date

Either buyer or seller can set an expiration date on their offer. This can put pressure on the other party and prevent them from drawing out the process longer than necessary.

Do Not Counter

There is nothing that says you have to counteroffer. If the other party’s offer is not to your liking, you can simply reject it. This can make the other party concerned that they may lose the sale and come back to you with a better offer.

Because this tactic effectively ends a negotiation, it leaves no “live” offer on the table. This tactic also leaves you open to accept any other offers that may come along.

Restrict The Timing

In a seller’s market, the “no offers until X date” can be an effective tactic. It often goes like this:

  1. The home is put on the market on a Friday afternoon. Details are then distributed to real estate agents in the area and placed online.
  2. An open house is scheduled for the Sunday of the same weekend.
  3. The seller says that offers will not be accepted until after the open house.

This kind of tactic puts pressure on buyers by putting them in a “you’ve only got one chance so give me your best offer” position.

Offer Cash If You Can

If you are in a position to do so, make a cash offer, especially if the seller is in a hurry to close. Removing the potential hurdles of the appraisal process can be very persuasive.

Keep How Much You Could Pay A Secret

Do not submit a pre-approval letter that lists the full amount you have been offered. Doing so lets the seller know how much you could pay for the home and puts them in a better position during the negotiations.

Start With Market Value And Not The Asking Price

Many people make the mistake of using the seller’s asking price as a starting point for negotiations. However, when you start thinking of a property in terms of the asking price, you are looking at it through the seller’s eyes, and what they think it is worth, or how much they want to get out of the sale.

Instead, begin by looking at a property using your research and your real estate agent’s expertise. Then, between you, decide how much the property is worth, in other words, the fair market value.

Use this figure as your starting point and you will reduce your chances of overpaying for a home.

Don’t Begin Negotiations With Your End-Game

Today both buyers and sellers expect the other parties in a home sale to at least try to negotiate. Therefore, except in a few very specific circumstances, it is a mistake to jump in with your best possible offer straight away.

When you do start with your endgame, you have nowhere to go in a negotiation. 

Offer Concessions The Other Party Will Find Valuable

If you are unable to offer the sales price, the other party wants, look for other ways to make your proposal attractive to them.

So, for example, if you know that the seller of your “new home to be” still has to find a new place to live, offer a rent-back agreement. This can put you in a strong position when it comes to negotiation if this is something the seller may value.

In this situation, you make an offer with a closing date and property price that works for you. You then offer to rent the home back to the seller for a fixed period if they need more time to move out. 

This can not only give you leverage on the other conditions in the sale but offering something of value to the other party can put you at the front of the line, even if yours is not the best dollar offer.

Consider Emotions Carefully

There is no cut and dried rule for whether or not you should get emotional when buying or selling a property.

On one hand, if the seller knows you adore their property they may try to wring every last cent and concession out of you. On the other, a seller may choose to sell to the person they think will love the home as much as they do.

There is one exception to this. Don’t insult someone’s home. Ever.

Some buyers feel that by walking around and listing all the things they want to change, it gives them leverage on the price. However, it is just as likely to insult the homeowner and have them reject your offer.

Don’t Panic

When you are writing or reviewing an offer or counter offer be careful not to panic. Don’t drop your price by more than you are comfortable with because you are scared of losing your buyer. Likewise, don’t offer a ridiculous amount over the asking price just to ensure you win the bidding war.

Select Your Language Carefully

When either writing your offer or counteroffer, or speaking with the buyers or seller, do not use words and phrases that are potentially confrontational or argumentative.

When people feel insulted, or attacked, they are more likely to dig their heels in and refuse to budge. By keeping things positive there is a greater possibility of achieving a final sales contract you can live with.

Try To Speak Face-To-Face

A face-to-face discussion can speed up the negotiation process. Instead of both parties going back and forth in writing, they can discuss all the terms of the contract in one fell swoop.

Of course, this only works if negotiations are positive. A few badly chosen words and this tactic can blow up in your face.

If you do choose to try this, one important word of warning. Keep track of the terms you are discussing and make notes as you go. Then, when the final sales contract is drawn up be sure to go through it carefully, line by line, to ensure it accurately reflects your discussions.

Once you have signed the contract, it is too late to go back and say “I thought we had agreed to…..”

Final Thoughts

When it comes to buying or selling a home, most people consider the dollar amount paid for the home, and not a lot else. However, there is much more to consider when negotiating the price of a property.

Arm yourself with plenty of knowledge, secure the services of a real estate agent who is able to help you negotiate, and be aware that this is a complex and often emotional experience for everyone involved.


By doing this you will, hopefully, be able to negotiate a price that you can feel good about and begin your new life in your new home on a positive note.

About The Author

Geoff Southworth is the creator of RealEstateInfoGuide.com, the site that helps new homeowners, investors, and homeowners-to-be successfully navigate the complex world of property ownership. Geoff is a real estate investor of 8 years has had experience as a manager of a debt-free, private real estate equity fund, as well as a Registered Nurse in Emergency Trauma and Cardiac Cath Lab Care. As a result, he has developed a unique “people first, business second” approach to real estate.

Check out the Full Author Biography here.


This article has been reviewed by our editorial board and has been approved for publication in accordance with our editorial policy.


Geoff Southworth is the creator of RealEstateInfoGuide.com, the site that helps new homeowners, investors, and homeowners-to-be successfully navigate the complex world of property ownership. Geoff is a real estate investor of 8 years has had experience as a manager of a debt-free, private real estate equity fund, as well as a Registered Nurse in Emergency Trauma and Cardiac Cath Lab Care. As a result, he has developed a unique “people first, business second” approach to real estate.

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